The Historic 2018 Maritime Boundary Treaty Between Timor-Leste and Australia

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The Historic 2018 Maritime Boundary Treaty Between Timor-Leste and Australia ISPSW Strategy Series: Focus on Defense and International Security Issue The Historic 2018 Maritime Boundary Treaty No. 573 between Timor-Leste and Australia Dr. Anne-Marie Schleich Sep 2018 The Historic 2018 Maritime Boundary Treaty between Timor-Leste and Australia Dr. Anne-Marie Schleich September 2018 Abstract The historic 2018 Maritime Boundary Treaty between Timor-Leste and Australia was the result of a new and unique conciliation process established under the United Nations Convention on the Law of the Sea (UNCLOS). It demarcated for the first time maritime boundaries between the two nations and increased the revenue sharing ratio of the gas reserves in favour of Timor-Leste. The speedy and efficient UNCLOS conciliation process promises to become a role model for the settlement of other maritime claims and sovereignty issues. About ISPSW The Institute for Strategic, Political, Security and Economic Consultancy (ISPSW) is a private institute for research and consultancy. The ISPSW is an objective, task-oriented and politically non-partisan institute. In the increasingly complex international environment of globalized economic processes and worldwide political, ecological, social and cultural change, which occasions both major opportunities and risks, decision- makers in the economic and political arena depend more than ever before on the advice of highly qualified experts. ISPSW offers a range of services, including strategic analyses, security consultancy, executive coaching and intercultural competency. ISPSW publications examine a wide range of topics connected with politics, the economy, international relations, and security/ defense. ISPSW network experts have held – in some cases for decades – executive positions and dispose over a wide range of experience in their respective fields of expertise. © Institut für Strategie- Politik- Sicherheits- und Wirtschaftsberatung ISPSW Giesebrechtstr. 9 Tel +49 (0)30 88 91 89 05 E-Mail: [email protected] 10629 Berlin Fax +49 (0)30 88 91 89 06 Website: http://www.ispsw.de Germany 1 ISPSW Strategy Series: Focus on Defense and International Security Issue The Historic 2018 Maritime Boundary Treaty No. 573 between Timor-Leste and Australia Dr. Anne-Marie Schleich Sep 2018 Analysis On March 6, 2018, the Foreign Ministers of Australia and Timor-Leste signed a landmark maritime boundaries treaty at the United Nations in New York after a record time of less than two years of negotiations. This Treaty between Australia and the Democratic Republic of Timor-Leste Establishing Their Maritime Boundaries in the Timor Sea was the result of a recent conciliation proceeding under the United Nations Convention on the Law of the Sea that could potentially serve as a worldwide model for other similar disputes. To understand the unique achievement of this conciliation process, one needs to trace back Timor-Leste’s history and the history of the longstanding maritime disputes and treaties in that region (1). I will also analyse the results of the conciliation process (2), the nature of the proceedings (3), and lessons that can be learnt for the resolution of similar disputes (4). History Timor-Leste, previously also known as Portuguese Timor and later East Timor, has been a Portuguese colony since the 1600s and became also known as Portuguese Timor. In a 1859 treaty with the Dutch, Portugal formally ceded the western half of Timor island to the Dutch. The Japanese occupied the whole island of Timor during World War II. After Indonesia’s proclamation of independence in 1945, Dutch Timor became part of the Indonesian East Nusa Tenggara province; East Timor remained under Portuguese rule. In November 1975 East Timor declared itself independent from Portugal. A few days later, Indonesia invaded East Timor and declared it a province of Indonesia. After 24 years of armed struggle against Indonesia, the majority of East Timoreans in 1999 voted for independence in a UN-supervised referendum. It became independent and was inter- nationally recognized on May 20, 2002 as the Democratic Republic of Timor-Leste. Even though the Australian government under Prime Minister John Howard early on supported East Timor’s independence aspirations, relations between the new nation and Australia remained strained because of long- standing disputes over maritime boundaries. The oil and gas fields in the so-called Timor Gap are estimated to be worth roughly $ US 65 billion. The Timor Gap had always posed a problem because of its geological complexity and overlapping seabed claims by both Australia and Indonesia. In 1971 and 1972 Indonesia and Australia had concluded two maritime boundary treaties, which gave Austra- lia considerable advantages in the delineation of the boundaries. There was the 1971 Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of Indonesia establishing certain Seabed Boundaries. It was followed by the 1972 Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of Indonesia establishing certain seabed boundaries in the area of the Timor and Arafura seas, supplementary to the Agreement of 18 May 1971.1 They were based on the “natural prolongation“ of the continental shelf thus drawing the boundaries north of the median lines between the shores of Australia and Indonesia. Portugal as the then colonial power in East Timor was not part of the negotiations. The ambiguity regarding the East Timor maritime boundaries continued. The 1989 Australian-Indonesian “Timor Gap Treaty” dealt with the joint exploration of the oil resources without addressing the respective territorial claims. The treaty, however, became invalid after East Timor’s independence from Indonesia. On the day of Timor-Leste’s 1 Anais Kedgley Laidlaw and Hao Duy Phan, Interstate Compulsory Conciliation Procedures and the Maritime Boundary Dispute between Timor-Leste and Australia, 2018, working paper © Institut für Strategie- Politik- Sicherheits- und Wirtschaftsberatung ISPSW Giesebrechtstr. 9 Tel +49 (0)30 88 91 89 05 E-Mail: [email protected] 10629 Berlin Fax +49 (0)30 88 91 89 06 Website: http://www.ispsw.de Germany 2 ISPSW Strategy Series: Focus on Defense and International Security Issue The Historic 2018 Maritime Boundary Treaty No. 573 between Timor-Leste and Australia Dr. Anne-Marie Schleich Sep 2018 independence in 2002, the government of the new nation signed the Timor Sea Treaty with Australia. It came into effect in 2003 and established the Joint Petroleum Development Area (JPDA). The treaty outlined the joint exploration of oil and gas resources in the area previously called Timor Gap and divided the revenues in favour of Australia (80%-20%). The “Treaty on Certain Maritime Arrangements in the Timor Sea” (CMATS) came into force in 2007. The terms for the Joint Petroleum Development Area (JPDA) established under the previous Timor Sea Treaty were simi- lar. But CMATS also demarcated the so called Greater Sunrise gas fields (also known as Sunrise and Trouba- dour fields, located 150 km southeast of Timor-Leste and 450 km northwest of Darwin, Australia) in a way more favourable to Australia. However, CMATS granted Timor-Leste a higher share of the estimated potential revenues of US $65 billion (50% instead of 20% under the Timor Sea Treaty). CMATS, again, offered no solu- tions on the maritime boundaries and on how these fields should be developed; two major shortcomings. In fact a 50-year moratorium was imposed on maritime boundary delineation (Strating). Australia has always claimed that its maritime boundary goes as far as its continental shelf, which far surpasses the equidistant line between the two countries. Timor-Leste, however, has been pushing for a maritime border at the median line between the countries. That would have placed the whole Greater Sunrise fields into Timorese waters and jurisdiction. The prevailing political sentiment within Timor-Leste was that CMATS was an unfair deal and impeded the economic development of the young nation. The main Timorese political parties were convinced that the Greater Sunrise field belonged exclusively to Timor-Leste. The dispute turned into an issue of sovereignty. Timor-Leste argued that the border should sit halfway between Timor-Leste and Australia, which would place most of the Greater Sunrise field in Timor-Leste’s territory. Moreover, the government was (and still is) under time pressure as the Bayu Undan gas field within the JDPA, Timor-Leste’s main source of income since 2004, is expected to run out of gas by 2022. In fact, more than 90 % of Timor-Leste’s budget is derived from oil income from the Bayu Undan field. Revelations about Australia’s alleged bugging of the Timor-Leste government offices in Dili in 2004 in order to gain a negotiation advantage caused political outrage in Timor-Leste. In 2013 Timor-Leste started arbitral proceedings against Australia under the Timor Sea Treaty, which were adminis- tered at the International Court of Arbitration to nullify CMATS. One of the grounds was Australia’s alleged 2004 spying operation on Timor-Leste’s negotiators. Timor-Leste terminated the CMATS treaty unilaterally in January 2016.2 It was in this political and historical context that Timor-Leste unexpectedly announced in April 2016 that it was initiating compulsory conciliation proceedings against Australia by invoking Annex V of the 1982 United Nations Convention of the Law of the Sea, UNCLOS. After all these decades of dispute, Timor-Leste wanted its maritime boundaries to be finally and firmly determined. And this was the only avenue open to it. Shortly before Timor-Leste’s independence, Australia had in 2002 declared the exclusion of any UNCLOS arbitral and judicial proceedings concerning its exclusive economic zone and the continental shelf boundaries.3 Conciliation proceedings, however, are compulsory for UNCLOS member countries. As a signatory to UNCLOS, Australia had no choice but to submit to the procedure despite its immediate protestations. It thereby ended its self- proclaimed moratorium on maritime boundaries dispute resolution.
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